Stone retaining walls are the bulk of my work experience in stonemasonry. I have built and restored dry stone retaining walls for 27 years. I do not build stone retaining walls with mortar, because dry stone retaining walls drain water naturally. Mortar traps and slows water behind a retaining wall, causing failure.
There are traits which stone retaining walls either do or don’t possess that determines the durability of the retaining wall. These traits are known and quantified, and are usually evident when looking at the face of a retaining wall.
Retaining walls need to lean into the soil or other material they are holding back. For this reason, vertical walls often fail no matter what material they are made with.
Retaining walls also need a certain amount of mass to resist the lateral pressure of soil, water, tree roots, etc. trying to push them over. Thin retaining walls lack this mass. 18″ is an average minimum thickness for a retaining wall to last. Also, stone is more dense than the inferior concrete wall materials often used in retaining walls. That density has a structural advantage over concrete.